Real Estate Information

ESCAZU all you need to know in Real Estate
1- EDITORIAL
2- THE COST OF LAND PER SQUARE METER IN ESCAZU
3- THE COST OF CONSTRUCTION
4- HOW TO ASSESS A PROPERTY IN A 1-2-3
5- HOW THE MUNICIPALITY ASSESSES PROPERTIES
6- SEVERAL RISKS & FIRE INSURANCE 7-BUYING A PROPERTY: LEGAL PART
8- REAL ESTATE 9- REASONS TO WORK WITH A REAL ESTATE BROKER
10- RESIDENTIAL MORTGAGE TO INDIVIDUALS
11- HOME INSPECTOR
1-EDITORIAL:

In this Escazu News you will find a very interesting study, including the price per square meter of land in this canton, based in a study in conjunction with several connoisseurs and real estate agents of the zone, but I will not only write about this subject, I investigated the price on which the municipality uses as a basis to assess the land for tax purposes. Besides the land, in this Escazu News you will find the following topics: a study of the price per square meter of construction, for which I obtained information from several builders and architects of the area, a also investigated all you need to buy a property, the requirements to obtain a loan, the legal procedures, insurances, etc. Why I thought about doing this special issue? For several reasons, one is because I have noticed there is a great speculation regarding prices in this area that it is insane, I often ask myself where are the gold bars are hidden. Another reason is because I have encountered people who say they are real estate agents but they are not, they are really salesmen, and there is a great difference between them. And for several other experiences I've seen this year where salesmen have little or none information about how to transfer a property. Or what is even worst is what happened to an international entrepreneur who was buying a property, and to whom they gave him a buyer's option for the property # xxx instead of the property # yyy, thank God he followed my advise and had hired a lawyer to advise him. Well, thanks a lot to everyone who participated as well as to those who didn't. I believe this EZN is quite complete and I hope you will enjoy it and that it will be helpful to you. (this speacial is availible in spanish EZN Sept Plus)
2-THE COST OF LAND PER SQUARE METER IN ESCAZU

Studying the Escazu area, I coordinated with a group of real estate agents, builders, specialists in tHe area, experts and salesment to carry out an investigation to find a realistic parameter of the price per square meter en al the Escazu area, including San Rafael, Downtown Escazu and San Antonio. It was very interesting to find out all the differences you can find, some prices were unreal, since they were greedy prices or in other words "if you pay I will sell". In this report I do not include private develpments. It should be noted that the price of a Private Develpment (gated community) is not the same as the price of a property next to it or a kilometer away. I have lately noticed this mistake in the owners as well as in those who advise them. It is also interesting, since to assess a lot there are uncountable variables such as size, plan, if it faces a main road, how much front it has, where it is located, etc. Also, about its location it is very important to know the future regulatory plan. Currently the market is based on demand and supply, there is more supply than demand, therefore, after revising the parameters, following I give you an idea of the prices per area. This study was based on a survey made to companies or persons which operate in this area. Following are their names according to the input given: Zucaes Escazu Bienes Raices, Miguel Rosencwaig, Brisa Bienes Raices, Berrnardo Pombo, Grupo Consultor Inmobiliario, Manfred Carvajal, Lisset Chacon, Oscar Alfaro, Casa Galeria, Ana Talia Sanz, Ivo Henfling, Go Dutch, Tomas Fernandez, Elizabeth de Lopez, Corredoras Asociadas, Mabinsa, Laura Zuniga, Guachipelin Realty , Giorgianella Freer, Ana Luisa Zuniga, Real Properties, Escazu Realty, S. F., Edgar Sandi, Es Negocios S.A., Ivania Jaikel, Premium del Oeste, Andres Zamora, REMAX OCEAN SURF REALTY, Marta Fritela, Mary Marta Bienes Raices, Architect Jose Luis Salinas, Architect Ricardo Molina, Arquitectura y Diseño SCGMT, Arturo Sotela, TK Bienes Raices, Yetty Schwartz, Ana Rosencwaig, P. P., Enrique Morice, Morice Vende, Engineer Fernando Peñaranda. Liliana Polanco & Daniel Langlois.
3-THE COST OF CONSTRUCTION Folowing is a parameter of the price per square meter of construction. **** (CONSTRUCTION COSTS DOES NOT INCLUDE BLUE PRINTS AND THE LOTS)

3- Three: how old is the construction and if it has been remodeled or has any added value.

With these information and based on the data of this EZN, section 2 and 3 we do the following: xx square meters of construction multiplied by the value (chapter 3) will give you the total. To this total amount, de deduct 2% per the year of construction, that will give you the price of the construction (if there is a value due to remodeling, follow the above instructions and added up), we then add xx square meters of land multiplied by the square meters of the area and we obtain the grand total.
EXAMPLE:
A house of 325 square meters built 10 years ago, of good quality, modern ceramic floors, first class kitchen, almost new in style and located in a neighborhood where the price is of $100 per square meter and has an area of 800 square meters.
** 325 x $600 = $195,000 minus 10 years (2% = 20% resulting in $39,0000), in other words: $195,000 minus $39,000 gives us a price for the construction of $156.000
** to this amount we add the land, 800 x 100 = $80000, and we will have the value of the property, approximately $236,000
In case this property was remodeled 4 years ago, and the remodeling cost $20000, for example, de deduct 2% to those $20000 per year, in other words, we deduct 8% to the $20000, resulting in $1600, that would give us a total of , this $18400 is added to the $236,000, therefore, the house with all parameters plus the remodeling would have a value of approximately $254,400
5-HOW THE MUNICIPALITY ASSESSES PROPERTIES

Please answer the following question for the Escazu News: How does the municipality determines the value of a property for tax purposes? This real estate tax is known as "territorial tax", what parameters does the municipality use to determine its value?

In response to these questions, hereon is the note received by Ing. Julián Morales Díaz of the Real Estate Assessment Office of the Municipality. Garrett Cotter. To make an assessment of a land, the comparison method is used, the lot to be assessed is compared to the type of lot in the homogeneous zone wherethe lot is located. The parameters used are: area, in front of a street or crossing road, level, location, form, services, types of roads and topography. These homogeneous zones are supplied by the Órgano de Normalización Técnica (O.N.T.) appointed by the Dirección General de Tributación Directa of the Ministerio de Hacienda, published in the Official Newspaper La Gaceta No 49 for the Escazú and San Antonio Districts on March, 11th, 1999 and in La Gaceta No 89 for San Rafael on May 12, 2003. To determine the value of constructions and facilities the constructive typology is used, where the different constructions are classified and the Ross-Heidecke method is used to determine the value of the constructions. To classify the constructions different parameters are used, such as: área, wall material, flooring, ceilings, structures, roofs, amount of rooms, amount of bathrooms, age of construction, remodelings, among others. The Constructive Typology is supplied by the Organo de Normalización Técnica (O.N.T.) appointed by the Dirección General de Tributación Directa of the Ministerio de Hacienda, published in the Official Newspaper La Gaceta No 59 of March 25th, 2003.

In this way the Assessment Office determines the values of the properties in tha Canton to collect the Real Estate Taxes according to Law No 7729 (Tax Law regarding real estate and its regulations) published in La Gaceta No 245 on December 19th, 1997. Furthermore, the value of the properties are updated through a voluntary declaration carried out every 5 years and through the assessments realized on the properties for those who did not make the declaration on time, according to the time period given by law. Besides the inclusion of the construction permits and mortgages, which are automatic modifications to the taxable base as determined by law.

The last items to establish the prices per square meter in the Escazu area are about to be approved. For example, Jaboncillo currently has a price of 8 thousand colones per square meter and the proposal is to increase it to 49 thousand colones per square meter. In the commercial area of downtown Escazu, the current price is of 18 thousand per square meter and the proposal is to establish it in 33 thousand colones per square meter.
U38 area comercial escazu centro
U42 carrizal lado de escazu
U46 area de jaboncillo hacia monsterio
U39 resto de escazu centro
U43 escazu centro lado del country
U47 alto raicero
U40 toycos, changos hacia calle san miguel ambos lados
U44 alto de carrizal
U41 area hulera hacia calle san miguel ambos lados
U45 area jaboncillo cementerio

CHART OF SAN ANTONIO

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The prices in the San Antonio area for the year 2005 will increase, but since a study will be carried out I will not talk about it. Currently the prices vary between 4 thousand to 12 thousand colones per square meter. Since the San Antonio area is so large
6-SEVERAL RISKS & FIRE INSURANCE

by Sergio Calderón, MBA INS-COMERCIAL DE SEGUROS Consultant Insurance Agent. Tel. 257-4400 (comerseguros@amnet.co.cr) Mobile 384-5689 (taurezur@yahoo.com.mx)
You could easily have at your disposal $500 a year, but what would happen if you suddenly have the urgent need to use $200.000? Let’s suppose that this is your house value, and a kitchen accident causes a fire that destroys it. Anybody could ask: ¿Did you have insurance? With a premium of $500 that problem would have been solved in a short period of time. Lesson: “It is better to have an insurance and not using it than needing one and not having it”. An Insurance is the best financial formula for transferring the risk to protect your patrimony.

The INS Several Risks and Fire Insurance called “Hogar Seguro 2000 (“Safe Home 2000”) is designed only for living houses and it is one of the least expensive insurances. Its cost (yearly premium) is around 25 dollars per year for each $10.000 of insured amount. With this policy you transfer to the INS a great deal of the expenses you may be forced to have in case of fire, lightning, natural catastrophic events and other risks like the eventual falling of an aircraft. In case of fire the INS pays the 100 % of the damages. To issue this policy you must know Government registration number of your property, the approximate built area in squared meters and the value of it. In this insurance you may include all the house hold furniture and other goods and you pay the same rate. But last and not least you may pay the policy with your credit card so you can at the same time make some extra points. The Theft Insurance is a complete separate one, and I will inform you about it in a future article
7-BUYING A PROPERTY: LEGAL PART. By Lic. William Muñoz Bravo

What do you have to do to buy a property in Costa Rica? Buying a property in Costa Rica is a simple process; however, you should also be careful, therefore you should obtain good counseling from your Real Estate Agent as well as from a lawyer you trust. After you have chosen the property you want to buy, ensure that the seller is really the owner of the property, also you have to verify the cadaster and in some cases the Municipality permit. In synthesis, you should corroborate that the property offered matches the documentation given by the seller. Although it is not indispensable, it is recommendable to hire a lawyer to carry out the corresponding inquiries in the Public Registry and National Cadaster (said institutions have a good database system, therefore, most properties, except those not registered, can be found there), and according to the results, you can decide if you want to buy said property. For this type of inquiries the lawyer has to have a copy of the plan or at least the property number, information that must be supplied by the seller. Once he has this information, the lawyer can determine the identity of the owner, the location of the property as well as its boundaries, and if the property has any tax burden, mortgage or annotation. If applicable, the lawyer must also obtain the information of who is currently occupying the property and if such person has any type of right on the property (of possession, leasing or other). There are other types of burdens or restrictions that the property can have and the lawyer is the right person to find that out. The lawyer can also inform you of the condominium regulations, the construction restrictions of the municipality, location of historic sites, protected areas, maritime zone, etc. All this information is gathered form the different governmental offices and institutions. The lawyer is generally chosen by the buyer, but when the property will be mortgaged then the seller's lawyer will also participate, however, as a recommendation to the buyer, your lawyer should always be present. Likewise, the expenses payment (legal taxes and stamps) and fees must be agreed by both parties beforehand. Generally, the expenses, in the case that the property will be mortgaged, are covered by the buyer, etc. The transfer fees are of approximately of 3.75% to 4% of the total price, distributed approximately as follows: 1.5% transfer taxes, 1% legal stamps, and 1.25% fees. It is very common to use a "sociedad anónima" when purchasing a property, the benefit of doing it this way is that the property will be under a corporate identification number totally different from the representative's identification number. To create a "sociedad anonima" to buy the property has an additional cost of approximately $300. Another very common and affordable practice is to buy a property that is already under a "sociedad anonima", since you would only transfer the company's shares and not the property, therefore, you don't have to pay for the fees, taxes and legal stamps since they have been already paid by seller. However, you have to verify that the "sociedad anonima" owner of the property is up to date legally and with the corresponding taxes paid. The cost of this type of procedure must be agreed with a professional you trust; however, you have to take into account that you will avoid the cost of taxes and legal stamps. Buying a property in Costa Rica is a heartwarming experience as long as you have the appropriate and efficient counseling. Lic. William Muñoz Bravo (attorney at law- Notary) Bufete Muñoz, Redondo & Asociados, tel 227-2638, fax 227-1157, cell 384-0448, San José, Costa Rica, e-mail http://web.archive.org/web/20080229000228/http://real-estate.escazunews....
8-REAL ESTATE IN ESCAZU

Escazu Zucaes specializes in the Escazu area, Santa Ana and all the areas west of the city of San Jose, offering personalized and professional service. Daniel Langlois has 26 years of experience in the area of real estate, rentals, be it buying or selling of houses, condominiums, properties. For more Information zucaes@racsa.co.cr Telephone /fax 228-9931 O 826-6858
9-REASONS TO WORK WITH A REAL ESTATE BROKER

By: Sonia López - Special article for Habitat, published on October 5, 2003 in the El Vocero Newspaper, Puerto Rico 1. A Real Estate Broker saves time. When you are busy with all your daily work and responsibilities, a broker can be working for you showing your house, classifying buyers or looking for the best place for your family.
2. A Real Estate Broker will take out the “stress” by helping you through the complexities of the trading processes. 3. A Real Estate Broker can access the updated inventory of houses for sale.
4. A Real Estate Broker is connected to a network of professional real estate brokers, minimizing the time you would invest in searching.
5. A Real Estate Broker knows the market. Can counsel buyers about the price of the property and can guide the sellers to apply the best price strategy.
6. A Real Estate Broker can help you with the financing, inspections, insurances and other requirements regarding the house. Can help you find all the professionals needed when you buy or sell a house.
7. A Real Estate Broker knows the legal aspects involved in the real estate transactions, giving you more security throughout the process.
8. A Real Estate Broker has the ability to carry out the necessary mediations and negotiations to ensure that your interests are fulfilled.
9. A Real Estate Broker can provide the details regarding the neighborhoods, school districts and the community, simplifying your purchase process.
10. A Real Estate Broker is a member of the community as you are, he/she has a genuine interest in protecting the value of your property as well as to increase the global life quality in the city.
10-HOME INSPECTOR By Ivo Henfling

If you're thinking to buy a new home, recently built or built many years ago, you have to understand that no home is in perfect shape. Mistake in construction, damages by small earthquakes, the use of cheap materials and accessories, bad installation of the same and thousands of other problems are common in our country and most countries in the world. Luckily there is a solution to all this: hire a home inspector, who for relatively little money will make a full inspection of the whole house and will write a report of all the damages and mistakes. This way you, as a buyer, will know before you will negotiate the price of the property to be purchased, how much you'll have to spend to repair or at least you'll know what to repair. The cost of the inspection is an investment, not a cost, which you will never regret.
11-RESIDENTIAL MORTGAGE TO INDIVIDUALS

Most banks require the same information, private as well as governmental banks, what varies is its service and rates. RESIDENTIAL MORTGAGE TO INDIVIDUALS Requirements to be attached Copies of tax returns for the past three years An income certification made by a C.P.A (Charter Accountant) which should indicate the monthly gross income (issued in Costa Rica ) or by Consul of Costa Rica in US. A copy of bank statements of investments and/or retirement accounts (the last 6 months). A copy of the last three months of credit card statements. A copy of purchase option agreement A copy of two photo identifications (drivers license, passport). Evidence of assets (deed of warranties, certificates of title) Requirements for Non-Residents Something important for foreigners living in Costa Rica who are not legally residents of the country or who have been for a short time. North Americans and Canadians can obtain loans in Scottia Bank since they can study your income in your country of origin. This bank can also accept Europeans and other nationalities. Their rates and interest rates are of approximately 1% higher than the rates given to Costa Ricans or legal residents. REQUIREMENTS ·Application form signed by the customer. ·Two identifications (drivers license, passport). ·Social Security Number ·Last address in the United States. ·Income tax return for the last two years. ·Income verification as following: Salaried borrower working for a company registered in the República de Costa Rica , must present income verification letter issued by company and addressed to Scotiabank de Costa Rica. Official letter must indicate the time the person has worked for the company, job position, and gross and net salary. To be included with the “orden patronal” Self-employed borrower , certified income by an authorized CPA registered in Costa Rica, addressed to Scotiabank de Costa Rica, must indicate activity of company, current job position, average gross and net income during the last fiscal period and the up- to -date average. It must include mention of all resources used to certify income such as account statements, receipts, etc. Borrower with incoming foreign income, certified income by authorized CPA, registered in Costa Rica, addressed to Scotiabank de Costa Rica, must indicate activity of company, current job position, average gross and net income during last fiscal period and the up- to – date average. It must include mention of all resources used to certify income such as account statements, receipts, etc. A copy of the last six months of bank statements of investment, retirement accounts, current and savings accounts. A copy of the last six months of the credit card statements. Evidence of assets (deed of warranties, certificates of title) in the name of the customer or the customer’s corporation. Register study of the properties and cars owned by the customer. Tax certification of all municipal taxes paid over the property. Copy of the purchase option agreement. Register study of the property. Two copies of the certified charts of the property (by catastro nacional). The bank conducts credit reports in the country of residence. All accounts shown on your credit report must be presented to the bank. This includes credit card statements, bank account statements, investments, etc. In the case of mortgage and other loans, the bank requires the receipt of the last payment made. For construction only: The approved construction charts by the Colegio de Ingenieros y Arquitectos de Costa Rica and by the Municipalidad. Schedule of activities of the construction The construction budget For refinancing purposes: Last receipt or a letter from the creditor. ·If the property will be in the name of a corporation we need additional information, please inform us about this matter. Information given by Diana Cordero F.Personal Banking Officer Scotiabank de Costa Rica Tel : 2880125 Fax : 2880126 diana.cordero@scotiabank.com

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Zucaes specializes in the Escazu area, Santa Ana and all the areas west of the city of San Jose, offering personalized and professional service. We have 38 years of experience in the area of real estate, rentals, be it buying or selling of houses, condominiums, properties.